HELOC
#17
Join Date: Oct 2017
Programs: Lots
Posts: 320
#18
Original Poster
Join Date: Jul 2017
Programs: UR, Marriott, AA, WN, Chick Fil A Red
Posts: 182
A secondary goal would be to lower my bust out score, which is currently thought to be a risk for shutdown by a bank Im currently enjoying. More than 1 real estate line open apparently lowers a persons bust out risk score according to reddit.
#19
Join Date: Sep 2014
Posts: 1,837
The goal would be to gain a method to deposit MOs in a way that wouldnt attract too much attention. It seems paying off debt (mortgage, car loan, etc) gets less critical attention. For example, Ive paid close to $50k of mortgage payments with MO, and never had a question. Ive also paid property taxes to the county for $18k over the last year, and theyve never hassled me as long the payment is in full. In contrast, for some checking accounts Ive gotten questions about as little as $2k in MO at a time.
A secondary goal would be to lower my bust out score, which is currently thought to be a risk for shutdown by a bank Im currently enjoying. More than 1 real estate line open apparently lowers a persons bust out risk score according to reddit.
#20
Join Date: May 2008
Location: PHL (kinda, no airport is really close)
Programs: AA Exp, but not sure for how long. Enterprise Platinum woo-hoo!
Posts: 4,546
A HELOC is not a guarantee they won't shut you down. I admit I've never read the fine print, but if banks have the slightest whiff of impropriety they can shut you down.
In my case, I had a HELOC at a bank that I was using for MO deposits. The HELOC typically has a 10-year term, after which you can't borrow anymore money but have to start paying it off, and my HELOC timed out on the 10 years shortly before they closed my checking account. They went so far as to block my internet access to even see my HELOC account! I had a high 5-figure balance (acquired in a way having nothing to do with MS) and of course I have to pay it off.
If you have good credit you can get a HELOC at around prime these days, but prime is climbing. Although you could probably make a payment BEFORE taking the advance, which would temporarily leave you with a credit balance, but you wouldn't pay interest. HELOC's usually have significantly lower closing costs than first mortgages.
I think you'd be better off opening bank accounts. When they shut you down, open another. There are lots of small local banks and credit unions.
In my case, I had a HELOC at a bank that I was using for MO deposits. The HELOC typically has a 10-year term, after which you can't borrow anymore money but have to start paying it off, and my HELOC timed out on the 10 years shortly before they closed my checking account. They went so far as to block my internet access to even see my HELOC account! I had a high 5-figure balance (acquired in a way having nothing to do with MS) and of course I have to pay it off.
If you have good credit you can get a HELOC at around prime these days, but prime is climbing. Although you could probably make a payment BEFORE taking the advance, which would temporarily leave you with a credit balance, but you wouldn't pay interest. HELOC's usually have significantly lower closing costs than first mortgages.
I think you'd be better off opening bank accounts. When they shut you down, open another. There are lots of small local banks and credit unions.
#21
A FlyerTalk Posting Legend; Moderator: American Express, Capital One, Citi, Chase, Credit Card Programs, Diners Club, Signatures
Join Date: Jun 2003
Location: Miami, Mpls & London
Programs: AA & Marriott Perpetual Platinum; DL & HH Gold
Posts: 48,880
In our case the cost was $0, but you are correct that the interest rate formula (prime + X) is higher than others which were available at the time. This served our purpose, because we expect not to use the line, but the interest rate should be a consideration if you are intending to use it.
#22
Original Poster
Join Date: Jul 2017
Programs: UR, Marriott, AA, WN, Chick Fil A Red
Posts: 182
In our case the cost was $0, but you are correct that the interest rate formula (prime + X) is higher than others which were available at the time. This served our purpose, because we expect not to use the line, but the interest rate should be a consideration if you are intending to use it.
#23
Join Date: Dec 2012
Location: SoCal
Posts: 123
Opened two "business" accounts a few years ago used exclusively for depositing mmo and paying associated cc bills. No fees and not a single problem with deposits and bill pay. Can easily deposit at their atms that read the m/o's.